Sears Holdings’ shareholders got a little holiday cheer in the form of the retail giant’s quarterly results. Comparable store sales at Kmart edged up 0.5 percent over the same quarter in 2008. Although the company recorded a net loss of $127 million for the third quarter, the result was an improvement on the $146 million net loss posted in the third quarter of 2008. A $101 million reduction in selling and administrative expenses helped improve the balance sheet. Sears cut its total debt by $678 million (to $3.8 billion), shrank its letters of credit by $194 million (to $803 million) and increased its cash balance to $1.5 billion (from last year’s $1.2 billion).
“We saw some encouraging signs of progress in the third quarter with the increases at Kmart and the decline in sales at Sears stores moderating during the quarter. Additionally we increased our margin rate,” says W. Bruce Johnson, Sears Holdings’ interim ceo and president. “As we approach this important selling season, we are focused on executing our holiday strategy and meeting our customers’ needs.”
However, Wall Street wasn’t warming up to retail stocks this morning. Although Limited Brands outperformed analysts’ expectations, profits at its Victoria’s Secret chain missed the mark. Good news for companies such as Williams-Sonoma, which also outpaced analysts’ expectations, wasn’t enough to generate momentum. The S&P Retail Index slid 1 percent.